Do not file a homeowners insurance claim if the repair costs are less than or slightly above your deductible, if the damage results from neglect or lack of maintenance (such as old roof leaks), or for wear-and-tear issues. Filing for minor, avoidable damages can trigger rate hikes or non-renewal of your policy.
Disadvantages of filing a homeowners insurance claim include potential premium increases, a negative impact on your insurance score, and the claim staying on your record for years, making future coverage harder or more expensive, especially if the claim is small (less than your deductible) or if you file multiple claims. The process itself can be stressful, time-consuming, and might result in claim denial or underpayment, leaving you with higher costs.
Sometimes, filing a claim may do more harm than good. If the cost of repairs is just a little above your deductible, consider paying out of pocket. The potential rate increase post-claim may cost significantly more in the long run. Frequent minor damage claims can also cause scrutiny.
Consider filing a homeowners insurance claim when:
The 80% rule in homeowners insurance requires you to insure your home for at least 80% of its total replacement cost to receive full coverage for partial losses, preventing underinsurance and significant out-of-pocket costs if damaged; if you fall below this threshold, your insurer pays a proportionate amount of the claim, not the full repair cost. This rule ensures you can rebuild, factoring in current material and labor costs, but excludes land value.
1. The Damage is Less Than or Slightly Above Your Deductible. If repairs will cost $800 and your deductible is $500, you'll only get $300 from insurance—likely not worth the potential premium increase. This is especially true if you have previous claims on your record.
Insurance companies decide your premium based on risk. Essentially, the greater your risk of filing a claim in the future, the higher your homeowner's insurance cost is likely to be. Unfortunately, this sometimes means that your insurance premium will go up after you file a claim.
Reduced Coverage: Filing multiple claims might prompt your insurer to reduce or limit coverage in high-risk areas, leaving you more vulnerable in the event of future damage. Non-Renewal or Denial: The worst-case scenario is your insurer deciding not to renew your policy or denying coverage altogether.
The 3 D's of insurance are “delay, deny, and defend.” They represent the 3-part strategy insurance companies use to avoid paying policyholders what they may be owed. These tactics may pressure some Americans into accepting lowball settlements, and they can result in claims being held up in court for years.
According to a 2024 Weiss Ratings study, Farm Bureau Property & Casualty Insurance Co. had the highest denial rate for homeowners' claims (70.5%), with USAA, Farmers, and Allstate also showing significantly high denial rates (around 48-50%) for 2023, often due to factors like lack of coverage for climate events (floods, fires), high deductibles, or missing documentation. However, top performers like Chubb and Travelers had much lower denial rates, around 6%.
Common denial reasons: Missing documents, missed deadlines, incomplete claim forms, policy exclusions, lack of sufficient evidence, coverage lapses, or failure to follow claim procedures often lead to denial.
After a claim, insurance rates can rise anywhere from 0% to over 50%, depending heavily on fault (at-fault claims cause bigger hikes), the claim's severity (injuries, major damage cost more), your driving record, the type of claim (comprehensive vs. at-fault), your insurer, and location. At-fault accidents often lead to 20-50%+ increases for several years, while not-at-fault or comprehensive claims (like hail, theft) usually result in smaller, if any, increases.
If the cost to repair damage to your home or the replacement cost of a damaged household item is significantly higher than your policy deductible, it probably makes sense to file a claim. However, if the total expense is only slightly higher than your deductible, you may want to consider paying these costs yourself.
What are the Principles of Insurance? The principles of insurance include seven key concepts: insurable interest, utmost good faith, proximate cause, indemnity, subrogation, contribution, and loss minimisation.
Major damage exists when the home has sustained structural or significant damages, is uninhabitable and requires extensive repairs. Any one of the following may constitute major damage. Substantial failure of structural elements of the residence (e.g., walls, roof, floors, foundation, etc.).
7 most common homeowners insurance claims
What they won't tell you is that their primary job is to save their company money—often at your expense. Insurance adjusters are not your advocates. They're trained professionals whose performance is measured by how much they save their company. Every dollar you don't receive is a dollar their employer keeps.
Making a home insurance claim is usually worth it only if the repair cost is significantly higher than your deductible, as filing claims can lead to higher premiums and even non-renewal, especially for small claims or frequent claims. Weigh the immediate financial relief against the long-term risk of increased costs, focusing on major covered events like fire, severe storms, or significant theft, rather than minor issues or wear-and-tear.
Insurance companies set their own policies for premium increases within the parameters of state laws. If you file a claim after your home has been damaged or destroyed, you may trigger a policy surcharge that increases your premium for a period of time — often several years.